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What's behind call activity in Acadia

Acadia Pharmaceuticals has slipped back below a key $5 level, but today's option activity is topped by large call trade.

optionMONSTER's systems show that a trader sold 7,500 December 2.50 calls against open interest of more than 18,000. At the same time, he or she bought 7,500 January 2014 4 calls for the ask price of $1.95 in volume that dwarfs open interest of just 3 contracts, so this is new activity.

If the December calls were sold to open a new position, this is a diagonal call spread. But it seems much more likely that this is a roll, with the trader selling the in-the-money calls that will expire in a few weeks and opening the position out more than a year to take advantage of any further gains.

ACAD is down 4 percent to $4.80 this morning. The stock gapped up last week from just above $2 to a high of $6.54 on positive news about an antipsychotic drug that it is developing. Shares slipped but have still been closing at or above $5 since then.

More than 20,000 ACAD options have already changed hands this morning, more than twice its daily average over the last month.